The moderating effects of transformational leadership and self-worth in the idiosyncratic deals - employee reactions relationship: A study of Indian hospitality industry

Abstract

Purpose – This paper examines the relationship between timing of negotiations and idiosyncratic deals (i-deals) through the moderating effects of core self-evaluations (CSE), and between i-deals and employee reactions through the moderating effects of transformational leadership behaviour (TLB) in the Indian hospitality industry. Design/methodology/approach – A total of 275 employees working in 39 companies responded to a self-administered questionnaire. To test the research hypotheses, the methodology of structural equation models was used. Findings – The results show that the relationship between before hiring negotiations and i-deals is stronger for those individuals who had low self-worth, due to countervailing forces created by their belief that they may not be eligible for i-deals. In contrast, the relationship between after hiring negotiations and i-deals is stronger for those who had high self-worth, due to their belief that they were entitled to i-deals. Additionally, the research highlights that the relationship between i-deals and employee reactions is stronger for those organisations, which are high on TLB. Research limitations/implications – The data does not allow for investigating dynamic causal inferences, because they were collected using a questionnaire at a single point in time, and they were reported in retrospect, raising measurement concerns about recall bias. Practical implications – From a managerial point of view, the findings of this study inform that in negotiating both employment conditions and work arrangements, organisations should try to achieve i-deals that are primarily flexibility focused, and that in increasing efficiency organisations should make the employees feel well supported in order to develop more confidence in deploying skills and abilities to address a more open view of their i-deals. Originality/value – The study contributes to our understanding about the Indian hospitality industry by utilising the self-enhancement theory in examining whether individual differences moderate the relationship between the timing of negotiations and i-deals, and also by utilizing the social exchange theory to examine whether TLB moderates the relationship between i-deals and employee reactions.